Franchisor failure : an assessment of the adequacy of regulatory response

Franchisor failure is one of the most problematic areas of the franchise relationship. It impacts negatively on landlords and other suppliers, but the contracting parties that are currently without legal rights to respond when a franchisor fails, and thus without consumer protection, are its franchisees. In this thesis I explore the current contractual, regulatory and commercial environment that franchisees inhabit, within the context of franchisor failure. I conclude that ex ante there are opportunities to level the playing field through consumer protection legislation. I also conclude that the task is not one solely for the consumer protection legislation; the problem should also be addressed ex post through the Corporations Act.

Allocation of authority in franchise chains

This article investigates the level of delegation in franchise chains, distinguishing the two most relevant franchising models: Business Format Franchising and Learning Network Franchising. The two models basically differ on the level of real authority (effective control over decisions) exercised by the franchisors. Differences in business features, such as the required standardization, monitoring costs and consumer sensitivity to variations in product attributes (consumer measurement costs), explain the adoption of the different models of franchising. These variables affect the trade-off between the risk of brand name loss and the gains in knowledge sharing and learning within the network. The higher the need for standardization, the higher is the risk of brand name loss, and, consequently, the more likely the franchisor will adopt an organizational design that confers more control over franchisees’ decisions, such as business format franchising. This paper presents two case studies with Brazilian food franchise chains that illustrate the main argument and suggest additional propositions. Moreover, an empirical analysis of 223 franchise chains provides additional support to the hypothesis of a negative the effect of required standardization on the level of delegation.

Investigating relationships between relationship quality, customer loyalty and cooperation : an empirical study of convenience stores' franchise chain systems in Taiwan

Franchising has been widely accepted as an effective way to conduct and expand businesses. However, a franchise system is not a guarantee of success in the market. A successful franchise system should rely on a close and strong franchising relationship. Franchising is an important relationship management business. Franchising arrangements normally last for a number of years, so the franchisor and franchisee in the arrangement relationship are usually motivated to cooperate with each other. In addition, highly loyal franchisees may be obtained through a successful long-term franchising relationship. Over the last few decades, there has been a tremendous wave of interest in franchising relationships. However, little research has been conducted to determine the reasons for long-term franchising relationships. As a result, this study focuses on the important elements that might lead to a successful long-term franchising relationship. This study attempts to examine empirically three essential constructs (relationship quality, cooperation and customer loyalty), which might lead to successful long-term franchising relationships between franchisees and franchisors among the convenience stores in Taiwan. Mailed questionnaires were utilised to collect the research data. A total of 500 surveys were mailed randomly to the manager/supervisor of convenience stores’ franchisees among the four main franchisors (7-ELEVEN, Family, Hi-Life and OK) in Taiwan. The final sample size is 120, yielding a response rate of 24 per cent. The results show that relationship quality positively influences the cooperative relationships between franchisors and franchisees. Relationship quality is also positively correlated with franchisees’ loyalty. Additionally, the results indicate that the cooperative relationships between franchisors and franchisees are significantly associated with franchisees’ loyalty.

Franchise nations : the future of nations?

In this paper, I extend the notion of franchise nations, borrowed from Neal Stephenson’s cyberpunk novel Snow Crash (1993), in order to employ it as a device for thinking about the future of the nation. I argue the concept to be particularly well suited for such contemplation because of its sound grounding in the historical intermesh of economic, political and cultural motivations intrinsic to the concept as well as lived experience of the nation. I illustrate this very briefly by casting (mainland) China as the master franchisor and the overseas Chinese as franchisees. Specifically, I discuss the media events concerning China that took place during 2008, such as the protests and counter-protests that occurred at various legs of the Olympic Torch Relay, the Sichuan earthquake of 12 May and the opening ceremony of the Beijing Olympics on 8 August, and reactions to these happenings from overseas Chinese located variously in Australia, Canada and the United States. I argue that employing the notion of franchise nations lays bare the commercial and political instrumentalism behind the promotion and courtship of diasporas by home nations but, crucially, also aids in the understanding of the reciprocal processes by which franchisees are fashioned out of these communities. Finally, I suggest that, aside from China, franchise nations may also be a useful approach for thinking about how nations like India and Singapore are expanded, exported and explained into the future.

Perspectives on Australian bankruptcy law through the prism of the World Bank report on the treatment of the insolvency of natural persons

The insolvency of natural persons raises questions not only for a nation’s economy but also for its concern for equity. The World Bank has recently released a Report on the Treatment of the Insolvency of Natural Persons to guide nations in addressing the issues raised by an individual debtor’s insolvency. A brief review of Australia’s personal insolvency laws shows that it addresses many of the issues raised by the Report. However two areas are identified as worthy of further investigation by policy-makers and scholars to better address a concern for equity.

Les obligations du franchiseur : étude du droit civil et du guide d'Unidroit sur les accords internationaux de franchise principale

"Mémoire présenté à la Faculté des études supérieures en vue de l'obtention du grade de Maîtrise en droit (LL.M.)". Ce mémoire a été accepté à l'unanimité et classé parmi les 15% des mémoires de la discipline.

A new era in United States cooperation in international insolvency adminstrations?

Cross-border insolvency laws are increasingly being influenced by the UNCITRAL Model Law on Cross-border Insolvency provisions. The United States has recently enacted domestic legislation based on these provisions by way of Ch 15 of the Bankruptcy Abuse Prevention and Consumer Protection Act 2005, which inserted Ch 15 into USC, Title 11. This article briefly explains the provisions of this United States legislation and draws attention to the important case law commenting and explaining same. It further attempts to alert local practitioners to the changes, benefits and detriments they may encounter when acting pursuant to this legislation.

Retail franchising : management and support within the franchise network

Management and support within the franchise network has been an underdeveloped area in the literature to date, especially in the international context. In light of this acknowledgment, the current paper will focus on management and support within the franchise network, by looking at coercive and non-coercive power sources, as methods used for control in the franchisor-franchisee relationship. The relationships between these power sources, the degree of uniformity and the franchise offering will subsequently be addressed.

The impact of franchisor support, brand commitment, brand citizenship behavior, and franchisee experience on franchisee-perceived brand image

Purpose: This study examines the impact of franchisor support, brand commitment, brand citizenship behavior, and franchisee experience on franchisee-perceived brand image (FPBI). Methodology: The hypotheses were tested using survey data from retail franchisees in Australia, structural equation modeling, and bootstrapping regression methods. Findings: The results show that both brand commitment and brand citizenship behavior mediate the effect of franchisor support on FPBI. However, the effect of franchisor support on FPBI via brand commitment is higher for franchisees with less experience compared to their more experienced counterparts. Practical implications: The study provides insights to franchise managers and B2B practitioners on factors that enhance FPBI. Originality/value: Despite the recognized importance of franchise brands, limited research examines how leveraging the franchise brand can improve franchisee performance. To address this gap, this study examines the effects of franchisor support on FPBI via brand commitment and brand citizenship behavior moderated by franchisee experience.

Franchisor-franchisee relationship and performance: influence of personality traits, entrepreneurial drive, and time of relationship

A literatura em franchising tem virtualmente ignorado o papel de aspectos psicologicos nos resultados interorganizacionais das empresas, a despeito de sua influencia nos resultados das organizações e da qualidade de relacionamento. Este estudo, portanto, tem por objetivo analisar a influência da personalidade e do potencial empreendedor na qualidade de relacionamento e desempenho financeiro na relação franqueador-franqueado, ao longo do tempo, sob a perspectiva dos franqueados. Este estudo analisa também o papel do tempo de relacionamento sobre a qualidade de relacionamento e o desempenho financeiro. Foi utilizado neste estudo um questionário de auto-preenchimento, enviado por e-mail, com o objetivo de recolher dados de uma amostra de 342 franqueados de 3 redes de franquias. A personalidade foi mensurada por meio dos “Cinco Grandes” traços de personalidade (escalas IPIP-B5): extroversão, agradabilidade, consciencia, estabilidade emocional e imaginação. O potencial empreendedor foi mensurado por meio do índice CEI (Carland Entrepreneurship Index). A qualidade do relacionamento foi estruturada como um constructo de segunda ordem, composto por 23 itens (incorporando confiança, comprometimento e satisfação com o relacionamento), e o desempenho financeiro foi representado por meio de uma escala de mensuração de crescimento de vendas e de rentabilidade. O tempo de relacionamento foi medido por meio dos meses de relacionamento entre franqueado e franqueador. As hipoteses foram testadas por meio de modelagem por equações estruturais, com a utilização do método de mínimos quadrados parciais (PLS), análise de regressão e análise de médias. Três das cinco dimensões da personalidade apresentaram o efeito previsto sobre as variáveis qualidade do relacionamento – agradabilidade (positivamente), estabilidade emocional (positivamente), e imaginação (positivamente). O desempenho financeiro foi influenciado, como previsto por consciência (positivamente), estabilidade emocional (positivamente), e imaginação (positivamente). Como esperado, a qualidade do relacionamento apresentou efeito positivo e significativo em relação ao desempenho financeiro. O potencial empreendedor apresentou o efeito positivo previsto apenas sobre desempenho. O tempo de relacionamento teve o efeito positivo esperado sobre o relacionamento franqueador-franqueado, em relação à qualidade do relacionamento e o desempenho financeiro, mas as diferenças entre as fases de relacionamento propostas foram apenas parcialmente confirmadas, uma vez que em somente duas fases (rotina e estabilização) a análise de médias mostrou diferenças significativas. Os resultados indicam que a personalidade influencia a qualidade de relacionamento e o desempenho, mas a meneira pela qual isso ocorre é diferente no contexto brasileiro, onde esta pesquisa foi realizada, dos achados da pesquisa conduzida na Austrália, sugerindo que fatores como cultura e estabilidade de mercado podem ter influencia sobre a relação entre traços de personalidade e qualidade de relacionamento, e traços de personalidade e desempenho financeiro. O potencial empreendedor parece influenciar positivamente o desempenho do franqueado, mas a sua influência não foi significativa em relação à qualidade do relacionamento. Os resultados também indicam a importância do tempo no desenvolvimento da qualidade de relacionamento e desempenho. Além disso, os relacionamentos de longo prazo estão relacionados a melhores avaliações de qualidade de relacionamento e desempenho financeiros por parte dos franqueados. As limitações do trabalho e sugestões para estudos futuros também são discutidos.

Brand trust and avoidance following brand crisis : a quasi-experiment on the effect of franchisor statements

Although franchising has become an important growth strategy in severalindustries over the last few decades, there are few empirical studies about the effects of franchisor communication strategy on customer responses in the context of franchise brand crisis. Two quasi-experimental studies were conducted to test the effect ofa franchisor ownership separation statement on brand trust and brand avoidance following a brand crisis situation. Results show that a franchisor’s explicit communication of the franchise brand’s individual ownership business structure is useful in preventing further negative spillover effect throughout the franchised chain when thebrand crisis occurs at a single franchise location. The authors also investigate the mechanism through which such communication influences customer behavior and the moderating effect of the brand crisis severity in affecting brand evaluation. These results offer guidance to franchise brand managers by providing insight into how to overcome a franchise brand crisis and by suggesting franchise context-specific managerial recommendations